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CA Foundation Contract of Indemnity and Guarantee — practice questions — page 3

Explore 70 free Contract of Indemnity and Guarantee questions in CA Foundation Businesslaw. Open each question or exercise to read its content, reference answers and available explanation.

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Contract of Indemnity and Guarantee questions and exercises with answers

Showing questions 61–70 of 70.

A, a surety, defends a suit with no reasonable grounds and pays the debt and costs. What can A recover from debtor B?Read the answer and worked solution →A guarantees up to 2,000 for rice supplied; less is supplied but A pays 2,000. A recovers?Read the answer and worked solution →Co-sureties for the same debt, absent a contrary contract, must contribute among themselves in what manner?Read the answer and worked solution →A, B and C are sureties to D for 3,000 rupees lent to E, who defaults. With no contrary contract, how much does each pay?Read the answer and worked solution →Sureties A, B, C agreed to bear 1/4, 1/4 and 1/2 of a 1,000 debt. What does C bear?Read the answer and worked solution →Do co-sureties under separate contracts, unaware of each other, share equally?Read the answer and worked solution →Sureties with bonds of 10,000, 20,000, 40,000 face a 30,000 default. Each pays?Read the answer and worked solution →With bonds of 10,000, 20,000, 40,000 and a 40,000 default, what do the first two sureties pay?Read the answer and worked solution →Section 147 states that co-sureties bound in different sums are liable to pay how, within their limits?Read the answer and worked solution →A promises to cover B against proceedings C may bring against B for 200 rupees. This is?Read the answer and worked solution →

Worked practice questions

A, a surety, defends a suit with no reasonable grounds and pays the debt and costs. What can A recover from debtor B?

  1. Debt and costs
  2. Only the costs
  3. Debt, not costs
  4. No recovery
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Correct answer: C. Debt, not costs

The debt was rightfully payable, but costs of a baseless defence were wrongly incurred and cannot be recovered.

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A guarantees up to 2,000 for rice supplied; less is supplied but A pays 2,000. A recovers?

  1. The full 2,000
  2. Half of the 2,000
  3. Nothing at all
  4. Price of rice sent
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Correct answer: D. Price of rice sent

A can recover only what he rightfully paid, which is the price of rice actually delivered.

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Co-sureties for the same debt, absent a contrary contract, must contribute among themselves in what manner?

  1. In equal shares
  2. In ratio of age
  3. As creditor chooses
  4. In order of signing
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Correct answer: A. In equal shares

Section 146 makes co-sureties liable, as between themselves, to pay equal shares of the debt.

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More Businesslaw topics

Negotiable Instruments Act 1881Nature of ContractsAgencyThe Limited Liability Partnership Act 2008PartnershipBreach of Contract and its RemediesPerformance of ContractCompanies Act 2013